Abstract
For a number of reasons government the world over have been unwilling to use water pricing to
achieve water use efficiency. This research addresses questions of what policy alternatives to
water pricing might improve irrigation water allocation efficiency. An empirical framework is
provided to compare irrigation policies for allocating scarce water to agricultural production in
Egypt and Morocco. Partial equilibrium agricultural sector models specific to Egypt and
Morocco were employed for policy tests. Positive Mathematical Programming (PMP) was used
to calibrate the models. Water pricing policy, water complementary input factor tax policy, and
output tax policy are tested. Results suggest that effective policy depends on the social, economic,
and environmental contexts of specific regions. The results for both countries demonstrate that
some of the alternative irrigation policies can work towards directing cropping decisions to less
water intensive crops and also generating revenues for governments in situations where
governments choose not to price water.
Key Words: alternative policy, agriculture, cropping pattern, input tax, output tax, positive
mathematical programming, water pricing, implementation.
Introduction
“In all economic activities, water demands depend on two factors, what is being produced, and
the efficiency with which it is produced” (Gleick). This is especially true in the agricultural
sector when we look for drivers to promote technology diffusion and lead wise use of irrigation
water. The drivers should aim to increase productivity per drop through irrigation technology
innovation and investment (water application efficiency) and allocate water among crops to
achieve the most profitable outcomes (water allocation efficiency). There are a wide range of
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